3 Shares You Should Have Bought In February: Anglo American plc (+177%), Glencore plc (+93%) Antofagasta plc (+58%)

Dave Sullivan examines what’s behind the spectacular share price rise of Anglo American plc (LON: AAL) up 177%, Glencore plc (LON: GLEN) up 93% & Antofagasta plc (LON: ANTO) up 58%.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The stock market never ceases to amaze me, or more to the point, how the market can be utterly bearish on a certain stock or sector, only for the tide to turn on a dime and the under-pressure stocks bounce back with a vengeance. It’s one of the many aspects of investing that keeps us on our toes and reminds us that we should always be prepared to reappraise our stance should the underlying picture change.

Shooting the lights out

And it’s on this theme that I continue with three stocks that have caught my attention while at my trading desk:  Anglo American (LSE: AAL), Glencore (LSE: GLEN) and Antofagasta (LSE: ANTO).

As can be seen from the one-month chart below, all three stocks have left the FTSE 100 for dust. Between 1 February and close of play on 7 March, Anglo American shares rose by a whopping 177%, Glencore shares have nearly doubled, up 93% and Antofagasta is the laggard, only up by 58%!

Should you invest £1,000 in Polymetal right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Polymetal made the list?

See the 6 stocks

This meteoric rise has taken most of the market (and indeed me) by surprise, as they embarked on the rollercoaster that currently shows no signs of stopping. Famous last words. However, I can’t help but wonder whether anyone had the foresight, or indeed the constitution, to hold onto this basket of shares for the last 26 trading days, given the volatility in the sector and the negativity towards the shares due to the impact of tumbling commodity prices.

A look at the longer term

That said, personally I don’t trade on momentum. Instead, I look at the fundamentals of the companies that I’m interested in buying, which includes a look at the current trading environment. This is also the case for shares that I hold and remains a continual process.

I believe that all investors should try to find out as much as they can about the general health of the sector in which their investments trade as it can be a while before tough conditions show in the company accounts.

And it’s the environment that currently puts me off the shares. The past week has seen what appears to be the start of a period of price consolidation in the commodities sector with Brent Crude edging over $40 per barrel yesterday. But I’d still like to see a sustained period of price stability across the sector as we see the current oversupply in the market work its way out.

Indeed, as we can see from the 12-month chart below, despite the meteoric rise of the shares under review over the last few weeks – all have still underperformed the FTSE 100 over the last 12 months. They suffered as the slump in the price of the material that they dig out of the ground collapsed, causing management to take drastic action to strengthen the balance sheet.

Will you grow richer in 2016?

However, there’s no doubt about it – this trade could well have been one of, if not the best, trade of the month. How long it will run for is anyone’s guess – but as things stand it’s still not for me.

Passive income stocks: our picks

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Dave Sullivan has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing For Beginners

£20,000 invested in an ISA could make this much passive income per year…

Our writer takes a look at the passive income potential of a £20k Stocks and Shares ISA portfolio invested in…

Read more »

Mature black couple enjoying shopping together in UK high street
Investing Articles

Here’s how a 50-year-old could aim for £1,400-a-month passive income from an ISA

Investing in a Stocks and Shares ISA is one way to target long-term passive income, even for those hitting their…

Read more »

Investing Articles

After hitting a new 52-week low can the Diageo share price ever recover? See what the experts say

Harvey Jones has taken a beating on the Diageo share price, and there's no end to his misery in sight.…

Read more »

Investing Articles

Should I cash in my Rolls-Royce shares?

This investor in Rolls-Royce shares is wondering whether now might be the best time to sell up and move on…

Read more »

Investing Articles

With gold above $3,000, is it time to consider buying this FTSE miner?

Here’s one FTSE 100 stock that should -- in theory -- benefit from the current global uncertainty and a rising…

Read more »

Investing Articles

3 possible ways to generate a £1k monthly second income in the stock market

Our writer outlines a trio of approaches someone could take to try and build a four-figure monthly second income from…

Read more »

Investing Articles

Is the booming BAE Systems share price a deadly trap?

The BAE system share price has been a huge beneficiary of today's geopolitical uncertainty but investors considering the stock should…

Read more »

Investing Articles

Thank you stock market: a rare chance to consider buying Nvidia stock?

Market forces have brought Nvidia stock and many of its peers down as the Nasdaq and S&P 500 reach correction…

Read more »